General Bankruptcy Information
Personal Bankruptcy – Business Bankruptcy – Chapter 7 – Chapter 13 Attorneys serving clients in Dallas, Fort Worth, Arlington, Grand Prairie, Irving, Weatherford, Mesquite, Plano, Bedford TX
The Information You Need to Help You Make an Informed Decision About Bankruptcy Law
With law offices throughout Texas, including the DFW Metroplex and North Texas, and South Texas, Bailey & Galyen assists clients with bankruptcy and financial matters. We understand that in order to make informed decisions about bankruptcy issues, you need accurate information and sound advice. For bankruptcy matters, we provide you with the information you need and the advice and service you expect so you can make informed decisions.
We are pleased to provide you with the following general information about Texas Bankruptcy Laws and issues you might be interested in if you or a family member has a bankruptcy matter, as well as answers to frequently asked questions about bankruptcy.
- What Is Bankruptcy Law?
- Chapter 7 Bankruptcy
- Chapter 11 Bankruptcy
- Chapter 13 Bankruptcy
- Why You Want a Bankruptcy Lawyer
- How Bailey & Galyen Helps Consumers and Businesses in Bankruptcy
- Business Bankruptcy
- Individual Bankruptcy
- Bankruptcy FAQ
- Contact Bailey & Galyen
What Is Bankruptcy Law?
Bankruptcy is a complex set of laws that govern an individual’s and business’ ability to discharge debts and obtain a fresh start. The bankruptcy laws had a major reform in 2005 with the Bankruptcy Abuse Prevention and Consumer Protection Act.
Under the act, individuals wishing to file bankruptcy must pass a ”means test,” which precludes many individuals with higher incomes from filing a Chapter 7 bankruptcy and forces them into a Chapter 13 bankruptcy, where they must pay all or part of their unsecured debts.
Secured debt has property attached to it, such as a car or home. If you default on your loan, the secured creditor may take back the property that corresponds to your loan. Unsecured debt has no property attached to it. The most common types of unsecured debt are most credit card bills and medical or hospital bills.
Bankruptcy, whether a Chapter 7 liquidation bankruptcy, a Chapter 11 business reorganization bankruptcy or a Chapter 13 individual reorganization bankruptcy, treats secured debt and unsecured debt differently.
One of the many benefits of filing bankruptcy is the “automatic stay.” The automatic stay requires creditors to immediately cease all collection efforts, including repossession and garnishments.
If you have an bankruptcy matter, including a consumer bankruptcy or a business bankruptcy, and you would like to discuss your situation with an experienced Texas bankruptcy attorney, please schedule a confidential consultation with Bailey & Galyen by calling us toll free at 855-748-0300 or filling out our intake form.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is often called a ”liquidation” bankruptcy. In simple terms, if you qualify for a Chapter 7 bankruptcy, a trustee will take and sell non-exempt assets and use the money to pay creditors, You are allowed to keep the assets allowed by state or federal law (called ”exemptions”) subject to any liens securing the exempt property. Many individuals and families in Texas do not lose assets, because Texas has generous exemption laws.
After a Chapter 7 bankruptcy, your debts are discharged, which means effectively forgiven by the court, and you are allowed a fresh start. Please note that a Chapter 7 bankruptcy does not get rid of liens against your property, nor does it allow you to keep property secured by a loan, unless you agree to assume or continue with your loan obligation. For example, you may not keep your house and discharge the mortgage. However, you may walk away from your house and discharge any outstanding balance on your home (for homes worth less than what you owe).
Both individuals (consumers) and businesses may file Chapter 7 bankruptcy.
You should consult an experienced bankruptcy attorney to understand your exemptions and how they work as well as learn whether you qualify for a Chapter 7 bankruptcy.
If you have a bankruptcy matter, including a possible Chapter 7 bankruptcy, that you would like to discuss with an experienced Texas bankruptcy attorney, please schedule a confidential consultation with Bailey & Galyen by calling us toll free at 855-748-0300 or filling out our intake form.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is a complex reorganization bankruptcy where a business can ask the court to allow it to reorganize its debts and continue as a profitable business entity. Chapter 11 can also be used by high nete worth individuals who do not qualify for chapter 7 or 13.
In most cases, when a business seeks Chapter 11 bankruptcy, the existing management remains in control of the business. This known a ”debtor in possession” and is subject to the oversight of the court.
In rare circumstances where a bankruptcy trustee (a person who represents the creditors) demonstrates that it would be in the best interest of all creditors to force the company into liquidation (Chapter 7 bankruptcy), the court may allow the trustee to convert the Chapter 11 bankruptcy to a Chapter 7 bankruptcy and take over management of the company assets.
A Chapter 11 bankruptcy can be a powerful tool for businesses. It allows a business to negotiate favorable loan terms and financing by allowing new creditors a priority on new business earnings. In addition, a Chapter 11 bankruptcy permits a business to cancel or renegotiate existing contracts.
If you have a bankruptcy matter, including a possible Chapter 11 bankruptcy, that you would like to discuss with an experienced Texas bankruptcy attorney, please schedule a confidential consultation with Bailey & Galyen by calling us toll free at 855-748-0300 or filling out our intake form.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is similar to a Chapter 11 bankruptcy but is designed for consumers and small businesses (such as sole proprietorships).
Most individuals who earn an income higher than the national average will be forced into a Chapter 13 bankruptcy (rather than a Chapter 7 bankruptcy) because of the ”means test” imposed by the 2005 bankruptcy reform act. However, even without being forced into a Chapter 13 bankruptcy, many individuals (consumers) prefer a Chapter 13 bankruptcy to a Chapter 7 because of their assets and their situation.
For example, a debtor who is behind on mortgage or car payments and who does not have many other debts may file Chapter 13 bankruptcy to gain more time to get caught up on missed payments. This type of bankruptcy can be especially helpful if a family member’s income was temporarily dropped or suspended.
In addition, a person with substantial assets and not very high debts may file a Chapter 13 bankruptcy in order to not risk losing any assets.
Like other types of bankruptcies, a Chapter 13 bankruptcy triggers an ”automatic stay” that stops collection efforts, including home foreclosures, car repossessions and garnishments, such as student loan garnishments and IRS garnishments.
A Chapter 13 (or any other type of bankruptcy) will not discharge certain debts but will buy you time to increase your income and rid yourself of other debts.
If you have a bankruptcy matter, including a possible Chapter 13 bankruptcy, that you would like to discuss with an experienced Texas bankruptcy attorney, please schedule a confidential consultation with Bailey & Galyen by calling us toll free at 855-748-0300 or filling out our intake form.
Why You Want a Bankruptcy Lawyer
Bankruptcy laws are complex, the laws are always changing and formalities are strictly observed. A mistake could prevent you from having your debts discharged and getting other benefits under the bankruptcy code.
An experienced bankruptcy lawyer will not only guide you through the bankruptcy process but also advise you on whether bankruptcy is your best option and which type of bankruptcy you should file. In some cases, especially when a family member is involved or you have a business interest, experienced counsel will be the difference between obtaining the full benefits of the bankruptcy laws and watching your business fail and your personal goals vanish.
Receiving advice and information from an experienced bankruptcy lawyer will allow you to have the information you need to make an informed decision.
An experienced bankruptcy lawyer will make sure you understand not only what needs to be done but also when it needs to be done. In addition, an experienced bankruptcy lawyer will make sure you understand exactly what is coming and are not surprised by the process or by the bankruptcy trustee (the person who represents the creditor in a bankruptcy).
Finally, your bankruptcy lawyer will help you prepare for any hearings or other requirements and help you compile the proper documentation and meet the requirements imposed by the bankruptcy code, including the requirements imposed under the 2005 bankruptcy reform act.
If you would like to retain an experienced Texas lawyer to discuss your bankruptcy matter, please schedule a confidential consultation with Bailey & Galyen by calling us toll free at 855-748-0300 or filling out our intake form.
How Bailey & Galyen Helps Consumers and Businesses in Bankruptcy
Located in offices throughout Texas, Bailey & Galyen represents businesses and consumers throughout Texas, including Dallas – Fort Worth and South Texas. By providing you with quality representation, experienced advice and the highest level of personal service, Bailey & Galyen can give you leverage when dealing with creditors.
You can rely on the accuracy of the information we provide and the knowledge and experience behind the advice we offer. We are dedicated to achieving your bankruptcy and financial goals and committed to you as a client. We will put ourselves in your shoes and treat you with the respect and compassion we would demand if we were the client.
We understand how to deal with creditors. When you retain Bailey & Galyen, you are telling your creditors that you are serious about your future and, more importantly, that you are taking the necessary steps to ensure that you are taking control of your debts.
We understand that the laws and processes are constantly changing and that the changes can be confusing. We dedicate ourselves to keeping current on the law and often know about changes before they actually become law. We use this information to your advantage.
To discuss your matter with an experienced Texas bankruptcy lawyer, please schedule a confidential consultation with Bailey & Galyen by calling us toll free at 855-748-0300 or filling out our intake form.
Businesses file bankruptcy for many reasons. A business may either liquidate or reorganize under the bankruptcy code. In some situations, it is better to liquidate than to reorganize. For example, if your business requires little investment, has few assets and is simply an extension of your skills, you might be better off liquidating and starting over with a new business.
However, if your business has significant assets, a substantial workforce and the potential to make a profit, you can use the bankruptcy laws to help you stop creditor collection actions, reject leases or contracts that are not advantageous, and buy time for your business to get on track.
Businesses also use the bankruptcy laws to buy time to sell their business or to realize more of a profit from asset sales than the fire-sale prices they would realize in a forced sale.
To discuss your matter with an experienced Texas business bankruptcy lawyer, please schedule a confidential consultation with Bailey & Galyen by calling us toll free at 855-748-0300 or filling out our intake form.
Consumer bankruptcy typically involves either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. A ”means test” determines if a consumer debtor can qualify for a Chapter 7 bankruptcy.
A Chapter 7 bankruptcy is basically a personal liquidation and takes much less time than a Chapter 13 bankruptcy. A Chapter 13 bankruptcy is basically a personal reorganization and allows payment of all debts during a three-to-five-year period.
Both Chapter 7 bankruptcy and Chapter 13 bankruptcy trigger an ”automatic stay” that stops all collection efforts by creditors, even foreclosure efforts, repossession efforts and garnishment proceedings.
More importantly, a personal or consumer bankruptcy will afford you an opportunity to discharge current debts and give you a fresh start. Basically, it gives you a second chance.
To discuss your matter with an experienced Texas Consumer Bankruptcy Lawyer, please schedule a confidential consultation with Bailey & Galyen by calling us toll free at 855-748-0300 or filling out our intake form.
Question: Do I need a lawyer to file bankruptcy?
Answer: No, you do not need bankruptcy lawyer to file for bankruptcy protection and go through the bankruptcy process. However, because of the consequences of making a mistake on your bankruptcy petition or throughout the course of your bankruptcy, you should retain counsel from an experienced bankruptcy attorney.
Question: Are student loans dischargeable under the bankruptcy code?
Answer: While it is possible to have student loans discharged, it is very rare that judges ever grant these. You may have your student loans discharged under bankruptcy if you can demonstrate that if you are forced to repay the loan, you will be unable to maintain a minimal standard of living for yourself and your dependents, that you will remain virtually insolvent for a significant period of time, and that you have made a good-faith effort to repay the student loan before filing bankruptcy.
Question: Can I stop my home form being foreclosed upon by filing bankruptcy?
Answer: You can delay foreclosure of your home by filing bankruptcy. This delay can be used to attempt to work out something with the mortgage company, seek financing from other sources or sell your home. If you file a Chapter 13 bankruptcy and can make up your mortgage payments over the next three to five years, you might be able to stop the foreclosure and keep your home. You should consult with an experienced bankruptcy lawyer to determine your options and what is best for your situation.
Contact Bailey & Galyen
Our goal is to provide you with the information you need to make informed decisions. We hope the information outlined above gives you a general understanding of bankruptcy law and some of the factors involved with the bankruptcy process.
To schedule a confidential consultation to answer your questions or to discuss your bankruptcy matter with a knowledgeable lawyer, please call us toll free at 855-748-0300, or fill out our intake form, and we will contact you to schedule a consultation.
At Bailey & Galyen we provide skilled legal representation to indiviuals across the State of Texas including the Dallas-Fort Worth communities of Arlington, Bedford, Dallas, Fort Worth, Irving, Grand Prairie, Mesquite Texas.
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